Final project pdf

M O L LY B U I C E Masters of Luxury and Fashion Management

FINAL PROPOSAL

Spring 2018

Rolex Line Extension

TABLE OF CONTENTS TABLE OF CONTENTS..............................................................2 ABSTRACT....................................................................................3 ABOUT ME........................................................................ ..........4 PROPOSAL TOPIC......................................................................5 WATCH INDUSTRY.....................................................................6 SMARTWATCH INDUSTRY.......................................................7 HEALTH/WELLNESS INDUSTRY.............................................8 CURRENT LUXURY SMARTWATCHES.................................9 ROLEX.........................................................................................10 SWOT..........................................................................................11 MENTAL/MARKET SPACE...............................................12-13 RESEARCH DESIGN..........................................................14-15 DELIVERABLES...................................................................16-17 PROJECT TIMELINE..........................................................18-19 ANNOTATED BIBLIOGRAPHY........................................20-23

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ABSTRACT It is no question that the luxury industry has been, and continues to be, impacted by the growing incorporation of technology within the market. Although on the cusp of the latest wearable technology trends, it is no secret that companies will need to adapt and accept the direction the market is turning. There is still a lot of uncertainty and resistance within the luxury market to incorporate wearble technology into their products, but the research shows this adaptation is crucial to staying relevant in an ever-changing market.

This M.A. project proposes a line extension for Rolex to develop a watch with smart technology. It will begin by exploring the watch industry, the smartwatch industry, as well as the health and wellness trends. In addition, Rolex’s brand history and core values that have helped establish its reputation. Also included is a SWOT, mental and market space, the project deliverables, and the projected timeline. The proposal of the line-extension will be followed by an in-depth final project.

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ABOUT ME M O L LY BUICE

Born and raised in the beautiful city of

Savannah, GA, I was able to experience SCAD from a young age. I decided to obtain my undergraduate degree in Fashion Merchandising from The University of Georgia before considering moving home to pursue my masters in Luxury and Fashion Management.

I’ve grown up with a family of athletes, and

although I may not be athletic myself, I’ve come to discover that my heart lies within the sports world. I plan to infuse my fashion background with my passion for the sports industry to further find my niche.

As I’ve grown older, I’ve learned to truly

appreciate all that SCAD and Savannah have to offer personally and professionally. SCAD has helped me find myself, my passions, and my strengths and weaknesses. My final project is a blend of all of my passions to showcase my potential as well as my personality.

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PROPOSAL Rolex is one the most recognizable and reputable brands in the world. They are known for their excellence in watchmaking, and seen as a star brand in the Swiss watch market.

This project proposes the development of a line-extension of Rolex Smartwatches, called Rolex Futura. As a brand, Rolex has been a key player in the watch industry, but after recent disruption caused by the smartwatch industry, it is vital for the brand to expand its product line to include wearable technology.

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WATC H I N D U ST RY Last years sales of smartwatches far exceeded the entire Swiss watch industry by nearly 8 million units. The Swiss-made watches are representative of the industry and an indicator of its health. Currency volatility, coupled with a loss of traction in formerly fast growing emerging markets, has triggered a marked slowdown in demand.

A key disruptor to the current watch industry is that wearable electronics are booming, especially amongst younger consumers. The trend is pushing growing numbers of traditional watchmakers into uncharted waters.

By 2020, global sales of wearable electronics are forecast to be higher than each of the mechanical, analogue and digital watch categories in terms of value. The category is emerging as a pivotal market for mid-priced global brands.

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LUXU RY WATC H I N D U ST RY: K EY FAC TO R S

M MILLENIALS

T TECHNOLOGY

O

C

ONLINE SHOPPING

COMPETITION

Younger generations aren’t

A key factor for the luxury

Another key factor changing the

Luxury watchmakers are compet-

interested in owning a watch

watch industry is the innova-

luxury watch industry includes

ing with a market of cheaper

based on its status symbol

tion in technology. As

the buying & reselling of watches

brands that offer essientially the

or sentimental value. They

technology continues to

online. This trend has diluted the

same exact product at a much

have grown up in a digital

expand and become more

value of the Swiss brands and al-

lower price. With the decrease in

age where cellphones can

personalized, the consumers

lowed consumers to purchase at a

resonance within the luxury watch

be utilized for telling time,

will adopt the newest trends

cheaper price. It has also elimi-

brands, this is a disruptive factor

but would rather spend their

in the industry rather than

nated the personal experience of

for creating competition from

disposable income on experi-

focus on the mechanisms of

purchasing the watch through a

alternative watchmakers.

ences over material items.

wristwatches.

certified retailer and becoming knowledgable on the brand.

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H E A LT H & WELLNESS TRACKING The health and wellness trend has been seen in many aspects of the industry, such as athleisure and healthy dining. The trend has directly impacted the utilization and adoption of the smartwatch for functional purposes

to leading a healthy & active

34 %

lifestyle.

tracking was their most impor-

that can help track heartrate, calories burned, amount of steps taken, on top of many additional functions provided through apps.

Impact

This innovation in technology has turned a basic accessory into a necessary component

According to Statista, 34% of smartwatch owners said fitness tant smart watch application

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CURRENT LUXURY S M A RTWATC H E S

As the trend of smartwatches con-

tinues to gain traction, there are still relatively few luxury key players to expand their product lines to include a smartwatch. The luxury watch industry is hesitant to adopt wearable technology trends, but for companies like Brietling it is proving to be a successful leap. One source stated “With the introduction of the Breitling Exospace B55 Connected watch, Breitling – a brand known for their “instruments for professionals”, have finally taken the plunge too. And from the response they are getting worldwide, it seems that they’ve struck gold” The current range of luxury smartwatches can be seen from Tag Heuer at $1,800 all the way to Breitlings model worth $6,850.

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ROLEX Rolex is owned by the Wilsdorf Foundation, which is a private trust and is managed by a private company.

The company, dating back to 1905, focuses on product innovation encompassing contemporary designs, high-quality materials and craftsmanship, and puts great emphasis on the Swiss watch-making tradition.

Rolex is regarded to as one of the most reputable brands in the world and is ranked #69 on Forbes most valuable brands list.

The Swiss watchmaker has a market value of over 8.7 billion dollars worldwide and makes up 2.4% of the entire luxury goods market share. The production takes place in Biel, Switzerland and the headquarters is based in Geneva. Rolex is known for its innovation in the watch industry, such as the first waterproof wristwatch, first to earn chronometer certification in a wristwatch, and the first watchmaker to develop self-winding automated movements.

One of the key attributes of Rolex is their ties to the sports industry. They have developed sponsorship with almost every major sporting event, and have developed watches to emmulate the athletes needs, such as the Daytona and the Oyster.

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S

Strong brand history High brand awareness/reputation Accessibility to large capital Excellent marketing/advertising High resonance in sports industry

O

Introduces new product lines under parent umbrella Strong market and industry growth in technology sector Allows higher customer return

W

Unfamiliar with modern technology techniques Maintain brand sentimental value

T

Loss of value in watches all together Cheaper alternatives New technological innovations outside the watch sector

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MENTAL S PA C E

Technology Enthusiasts Rolex brand loyal customers

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M A R K E T S PA C E Active Millenials Young business professionals

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secondary research Rolex Brand Watch Industry Smartwatch Industry Health and Wellness Trend

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RESEARCH DESIGN

primary research Interviews Observations Survey Personal shopping at local jewelers

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Process Book A detailed and coherent story including research, key findings, necessary steps, strategies, plans, and visuals

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PROJECT DELIVERABLES 16

IMC Plan A comprehensive plan evaluating the marketing and communication strategy for Rolex in order to extend into the wearable technology market

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Forecast Potential sales growth for Rolex through the line extension

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Mock-Up designs A visual concept of the new Rolex smartwatch design and blueprint

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PROJECT TIMELINE Gantt Chart outlining projected timeline and schedule of the final project

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ANNOTATED BIBLIOGRAPHY . Simkin, Martin. “Top 10 Luxury Smartwatches 2017.” Top 10 Luxury Smartwatches 2017, Smartwatches4u, 5 Jan. 2016, www.smartwatches4u.com/news/Top-Luxury-Smartwatches.

This article discusses the top luxury smartwatches in the industry and gives details on their features and what makes them

unique. Simkin also describes their functional value and their success in the market.

Pierce, David. “Even Switzerland Is Obsessed With Smartwatches Now.” Wired, Conde Nast, 3 June 2017, www.wired.com/2017/03/evenswitzerland-obsessed-smartwatches-now/.

This article discusses the changes seen at Baselworld in 2017, and the adoption of smart technology is on everyone’s minds.

Pierce states that “The components needed to add, say, Bluetooth, to a watch are so small, so efficient, and so cheap that

there’s little reason not to include them.”

Biggs, John. “It’s Not Hard to Beat Rolex, Apple.” TechCrunch, TechCrunch, 14 Sept. 2017, techcrunch.com/2017/09/13/its-not-hard-tobeat-rolex/.

This article gives insight on Apple surpassing Rolex as the most popular watch brand in the world and discusses the idea that

many luxury watchmakers aren’t considered luxuriously unattainable.

“Rolex on the Forbes World’s Most Valuable Brands List.” Forbes, Forbes Magazine, May 2017, www.forbes.com/companies/rolex/.

This Forbes article showcases Rolex as the #69 most valuable brand in the world and gives insight to their market value and profit percentage of almost 30%. It also states that Rolex sells over 800,000 watches a year and is endorsed by many

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sports athletes.

Statista. “Luxury Watches: Leading Brand Sales Worldwide 2016 | Statistic.” Statista, Nov. 2017, www.statista.com/statistics/789382/ leading-luxury-watch-brands-sales/.

This statistic shows the sales of the leading luxury watch brands worldwide in 2016.

Adams, Ariel. “Despite Consumer Demand, The Luxury Watch Industry Will Have To Shrink Before It Recovers.” Forbes, Forbes Magazine, 26 June 2017, www.forbes.com/sites/arieladams/2017/06/23/despite-consumer-demand-the-luxury-watch-industry-will-have-toshrink-before-it-recovers/.

This article discusses the disruptors in the luxury watch industry, and what should be expected in the future. The luxury watch

industry is in its most vulnerable positions since the 1970’s, and the change in the market will greatly influence which

companies stay relevant. It also states the different factors that have influenced the change in the watchmaking industry.

The Watch Guide. “In-Depth Review of the Breitling Exospace B55 Connected Watch.” The Watch Guide, 10 Aug. 2017, www.ethoswatches.com/the-watch-guide/breitling-exospace-b55-connected-watch/.

The watch guide article is a review on the Breitling Exospace B55 Connected watch. It details the price, all the functions, the

sporty aesthetic, and the market acceptance.

Adams, Ariel. “Breitling Exospace B55 Connected Watch Review.” ABlogtoWatch, ABlogToWatch, 1 May 2016, www.ablogtowatch.com/ breitling-exospace-b55-connected-watch-review/.

Another article reviewing the Breitling connected watch. This article gives more insight as to why the price is appropriate and

how the functions are valuable to the Breitling customer.

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ANNOTATED BIBLIOGRAPHY Euromonitor. “Rolex SA in Luxury Goods.” Euromonitor International, 22 Nov. 2016, www.euromonitor.com/.

The Euromonitor database gives insight on current statistics on Rolex in the luxury goods market. It discusses Rolex strategic

direction and their competitive position in the market. It gives insight and statistics on their market value, innovations, and

production.

Adams, Ariel. “How The Swiss Luxury Watch Industry Is Dismantling Business Operations In America.” Forbes, Forbes Magazine, 18 Mar. 2018, www.forbes.com/sites/arieladams/2018/03/02/the-swiss-luxury-watch-industry-is-dismantling-business-ops-in-america-its-mostimportant-market/#11e78b0969f3.

Adams discusses the threats to the Swiss watch industry in the U.S. Stating the war with retailers, shrinking work force, and

the gray market are all key factors for the struggle within the U.S. market in terms of Swiss watch makers.

Euromonitor International. “Is Time Running out for Traditional Watches.” Strategy Briefing, Euromonitor International, Apr. 2016, www. euromonitor.com/is-time-running-out-for-traditional-watches-/report

This Euromonitor strategy brief discusses the fate of the traditional watch market. It names the key components changing the

market, including technology and changing consumers, as well as the crisis in Hong Kong and India producing cheaper alter

natives in the watch industry.

Dalton, Matthew. “Is Time Running Out for the Swiss Watch Industry?” The Wall Street Journal, Dow Jones & Company, 12 Mar. 2018, www.wsj.com/articles/is-time-running-out-for-the-swiss-watch-industry-1520867714

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This article discussed the changes in the swiss watch industry, specifically focusing on the CEO of Tag Heuer, a brand under

the LVMH conglomerate, Jean-Claude Biver. He discusses his take on the changing watch industry, and how he plans to

incorporate the new technologies to remain relevant in a digital market.

Biggs, John. “The Swiss Watch Industry Is Doomed.” TechCrunch, TechCrunch, 9 Sept. 2016, techcrunch.com/2016/09/08/the-swisswatch-industry-is-doomed/.

This article specifically focuses on the competition from small, cheap watchmakers as one of the main factors to swiss watch

makers fate. It discusses how watches are changing from a sentimental product to a commodity product as more options are

produced and the consumers opinions on timepieces evolves.

Thompson, Joe. “This Swiss CEO Is Sounding the Alarm on Apple.” Bloomberg.com, Bloomberg, 30 Apr. 2018, www.bloomberg.com/ news/articles/2018-04-30/this-swiss-ceo-is-sounding-the-alarm-on-apple.

Frederique Constant’s Peter Stas details why the Swiss watch industry is heading for trouble and can’t ignore smartwatches

any longer. He discusses the changes in the market and the impact of technology. Stas also believes that luxury swiss watch

makers must develop smart technology in order to stay relevant.

“Watch Industry Statistics.” FH - Watch Industry Statistics, Federation of the Swiss Watch Industry FH, 2018, www.fhs.swiss/eng/statistics. html.

This is the statistical analysis of the swiss watch industry and the previous, as well as current, status of the swiss

watchmakers. Gives insight on world exports, annual reports, revenue generation, top brands, and other important figures

regarding the luxury watchmaking industry.

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ROLEX FUTURA Molly Buice Spring 2018 M.A. Luxury and Fashion Management